Export prices of non-fragrant rice continued to increase considerably, following the ongoing
shipment of white rice to fulfill the outstanding contracts for Iran and Iraq. Also, demand for
Thai parboiled rice from African countries was reportedly strong due to limited exportable
supplies of the major competitors, particularly India. Trade sources reported that domestic
prices of parboiled rice also increased significantly in response to the tight supply situation
of local paddy. Moreover, the Thai commerce ministry has recently extended the
government intervention program for second crop from ending on July 31, 2004 to
September 30, 2004. Also, the intervention price for 100% grade white rice paddy was
announced to increase from 5,250 Baht/ton (roughly US$ 131/ton) to 5,900 Baht/ton
(roughly US$ 148/ton). In addition, the authority has proposed to raise the intervention
prices for MY 2004/05 major crop’s intervention program (Nov. 1, 2004 – Feb. 28, 2005) by
about 1,000 baht/ton (roughly US$ 25/ton) from the previous year.

As for fragrant rice, export prices continued to decline due to the increasing supply of the
relatively cheaper “Pathumthani 1” fragrant rice, for which the government policy remains
uncertain in its classification. At present, it is not classified as Thai Homali rice or traditional
fragrant rice. Moreover, regarding the government’s recent intention to release the stock of
old crop fragrant rice (MY 2001/02 – MY 2002/03), trade sources expected downward
pressure on domestic prices of fragrant rice.